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My friend has an 02 TB Ls with the service 4wd light on and the selector indicator light does not burn full time. It comes on all positions when you start the vehicle but then they go out. He had it checked at a local shop with a scanner. Not sure if it was obd2 or tech. but he said it had code 550? I cant find info anywhere. what do we need to replace?

Condition
Some customers may comment that the 4WD/AWD indicator lights on the selector switch do not work, or the 4WD/AWD system may be inoperative and/or the service 4WD light is illuminated. The condition is typically intermittent and always occurs at key-up. Upon investigation, the technician may find DTC C0550 set.

Cause
The Transfer Case Control Module (TCCM) has not received the wake-up call during key-up and has remained in the "sleep mode".

When the TCCM is in the "sleep mode", it will not communicate with the class II bus or the Tech 2®.

Correction
Try to communicate with the TCCM. If no communication, go to step 2. If communication is possible, go to step 5.
Remove the underhood (ATCM or TREC) TCCM fuse.
Wait 30 seconds.
Reinstall the fuse. The module should "wake up" and communicate with the Tech 2®.
Check for codes in the TCCM. If a C0550 is found current or in history with or without other codes, replace the module and go to step 6.
Reprogram the TCCM with the latest TIS software using normal SPS procedures.
Verify operation and that no codes are present.
Important: For the 2002 model year, the TCCM must be replaced and reprogrammed.

Condition
Some customers may comment that the Service 4WD light is on, the 4WD system is inoperative or the 4WD switch indicator lights are blinking.

Service Diagnosis
Technicians may find DTC C0327 in the Transfer Case Control Module (TCCM). This would indicate an encoder sensor malfunction.

It is also possible that the module may be in a mode that will not allow any shifts or updates for the software or calibrations. If this occurs, the TREC fuse (in the engine compartment) must be pulled and reinstalled after 30 seconds. This should allow further operation and service of the system. If a C0550 code is found, this is an unrelated concern and SI diagnostics should be followed for this concern.

Correction
Important: Carefully handle and install the new encoder. Improper installation of the encoder could result in a repeat failure.

Raise the vehicle.
Disconnect the transfer case motor/encoder wiring harness.
Remove the four bolts that secure the motor/encoder to the transfer case.
Remove the motor/encoder from the transfer case.

Remove the black plastic gasket/over plate from the motor/encoder.

5.1. Push out the two "single" locking tabs (two lower arrows in illustration above) located on the underside of the housing (motor end).

5.2. At the other end of the gasket/cover plate, place a flathead screwdriver tip (1) between the gasket/cover plate and the motor housing near the "dual" locking tabs. Twist the screwdriver clockwise/counterclockwise at both sides until the locking tabs break and the gasket/cover plate comes off.

5.3. Discard the gasket/cover plate.

Avoiding the wire connection, take two small flathead screwdrivers (one on each side of the encoder) and rock the encoder sensor out using light pressure on each screwdriver.
Gently remove the encoder sensor from the wire harness connector. Pry these apart by inserting a small flathead screwdriver between the terminals and the harness connector. Verify that no damage or corrosion exists on either male encoder terminals or female wiring harness terminals.

Install the new encoder sensor by connecting to the harness and then gently sliding the encoder sensor over the motor shaft. The hex feature (3) on the encoder should face down toward the motor housing. Make sure the tab (1) on the encoder mates with the notch (2) on the shaft. If the encoder tab is not aligned with the output shaft, rotate the encoder inner ring by hand to mate properly. Press the encoder fully onto the shaft and into the housing.

Important:

• Make sure the encoder cover (1) is flush or below the surface of the motor housing and fully seated into place.

• Ensure that the new encoder/harness assembly is fully seated to the encoder sensor.

Install a new gasket/cover plate. This should snap into position. Make sure all the four tabs are FULLY engaged.
Install the motor/encoder onto the transfer case using four M8-1.25 X .35 flange head bolts.
Tighten
Tighten all four bolts to 13.5 to 17.6 N·m (10 to 13 lb ft).

Connect the transfer case motor/encoder wiring harness.
Following normal SPS reprogramming procedures, reprogram the transfer case control module with the latest software calibration.
Verify that the 4WD system is operational.
Parts Information
Part Number
Description

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